* Clashes highlight risk of wider conflict in Caucasus
* Karabakh says one more soldier killed by Azeri sniper
* Azeri, Armenian presidents to meet in Sochi soon
* OSCE, EU say concerned by escalation of conflict (Raises death toll of latest clashes, adds EU statement)
By Hasmik Mkrtchyan and Nailia Bagirova
YEREVAN/BAKU, Aug 4 (Reuters) - Azerbaijan and Armenia accused each other on Monday of stoking tensions over the breakaway enclave of Nagorno-Karabakh inside Azerbaijan after a recurrence of fighting last week, although Yerevan said there was no immediate threat of war.
The clashes on the Azeri enclave’s fringes, in which at least 16 combatants were killed and several were wounded, highlighted the risk of broader conflict in the South Caucasus area where vital oil and natural gas flow from the Caspian region to Europe.
Energy-producing Azerbaijan, host to oil majors including BP , Chevron and ExxonMobil, frequently threatens to take Nagorno-Karabakh back by force and is spending heavily on its armed forces.
“The situation at the front line remains tense ... But analyses of the recent days shows that in a global context there are no grounds today for a large-scale war,” Armenian Defence Minister Seyran Ohanyan told journalists.
He accused Azerbaijan of responsibility for the hostilities over Nagorno-Karabakh, a majority ethnic Armenian enclave.
“The whole responsibility for escalation of the situation and human losses is on official Baku, which is the initiator of the tension on the front line,” Ohanyan said in Yerevan.
For its part, Azerbaijan accused Armenia of escalating the more than 20-year-old conflict and then pinning the blame on Baku.
“Armenians accuse Azeri armed forces of sending sabotage groups into the Armenian army. It does not correspond with any logic,” Novruz Mamedov, deputy head of Baku’s presidential administration, told journalists in the Azeri capital.
The breakaway enclave said late on Monday one of its combatants was killed by a sniper from the Azeri side, raising the number of killed on both sides to at least 16. Local news agencies, however, report more deaths.
The presidents of Armenia and Azerbaijan, both former Soviet republics, are expected to meet in the Russian Caucasus city of Sochi later this week to discuss ways to resolve the conflict.
Fighting over Nagorno-Karabakh first erupted in 1991, when the Soviet Union broke up, and a ceasefire was called in 1994. But Azerbaijan and Armenia have regularly traded accusations of further violence around the enclave and along the Azeri-Armenian border.
Nagorno-Karabakh has run its own affairs with heavy military and financial backing from Armenia since the war that killed about 30,000 people two decades ago. Armenian-backed forces also seized seven Azeri districts surrounding Nagorno-Karabakh.
Efforts to reach a permanent settlement have failed despite mediation led by France, Russia and the United States.
“Recent reports of multiple incidents along the front lines are cause for concern,” Andrzej Kasprzyk, a senior envoy for the Organisation for Security and Cooperation in Europe (OSCE), the continent’s main rights watchdog, said in a statement.
“In line with my mandate, I will continue liaising closely with the sides, including at the highest levels, with a view to assist them in de-escalating the situation.”
The European Union urged the sides to observe the ceasefire.
“We call on both sides to immediately respect the ceasefire, refrain from the use of force or any threat thereof and continue efforts towards a peaceful resolution of the Nagorno-Karabakh conflict,” the spokesman for EU foreign policy chief Catherine Ashton said in a statement. (Writing by Margarita Antidze; Editing by Paul Simao)